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Debt-to-Credit Ratio

Lenders can easily calculate your debt to credit ratio is to see just how close to being in financial trouble you are. Debt used divided by Available credit = Debt Load.

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Debt-to-Equity Ratio

The debt-to-equity ratio indicates the relative proportion of equity and debt used to finance a mortgage loan.

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Debt-to-Income Ratio

A debt-to-income ratio, or DTI, is the percentage of your income per month that goes to paying off all recurring debt payments. This type of DTI is called a back-end ratio; a front-end DTI only includes payments to housing costs. There are many other economic ratios, such as debt-to-equity, debt-to-credit and debt-to-capital, used in the underwriting process as well.

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Deed

A deed is a certificate of ownership which transfers a home from the seller to the purchaser. A deed is registered against the title to the property as evidence of the purchaser's ownership of the property.

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Default

A default occurs when you can no longer afford your loan payments and stop making payments. In the event of default, most lenders have one or more acceleration clauses, which provide reasons why the lender can immediately repossess the borrower's collateral assets or demand the remaining balance of the loan.

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Delinquency

Delinquency occurs when you do not submit a payment on time. Many mortgage policies have a grace period of ~30 days for payment.

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Deposit

A deposit is a sum of money deposited in trust by the purchaser when making an offer to be held in trust by the vendor's agent, broker, lawyer or notary until the closing date.

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Depreciation

Depreciation is the decrease in the value of an asset over time.

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Discharge of Mortgage

A mortgage is discharged when the loan is completely repaid and the lender issues a certificate officially stating so.

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Down Payment

A down payment is the amount of money you pay upfront towards the full purchase of your home or property. The larger the down payment, the less money you need to borrow and the less interest you accrue on a mortgage loan. Down payments in Canada can be as low as five per cent of the purchase price, although 10 per cent is quite common and is a good rule of thumb to use when calculating your down payment.

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Effectual Age

This is a term often used by appraisers to determine the remaining life of a building based on its utility, in other words, how well the property has fared over the years.

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Encumbrance

An encumbrance is a claim against an asset by another party that obstructs its transferability or shrinks its value.

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Equity

Are you looking for home equity?

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Firm Offer

Irrevocable, written, and signed offer regarding the sale or purchase of real estate at a specified price, and valid for a specified period. If no closing or expiration date is specified, the offer is normally considered to be open for 30 days after its presentation. A firm offer is also referred to as a confirmed offer.

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Fixed Rate Mortgage

In a fixed-rate mortgage, the interest rate stays steadfast. The interest rate for a fixed rate mortgage will not fluctuate. It is set, and will not change for the entire term of the mortgage.

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Forbearance

Forbearance is an agreement that occurs when you ask your lender to not repossess your home, but rather negotiate a mortgage plan that will work with your financial situation. Understandably, forbearance is only exercised when a homeowner can demonstrate that the present crisis is but a hiccup in a long history of fruitful finances.

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Foreclosure

A foreclosure, also called repossession, occurs when a lender attempts to recover the balance of principal by forcing the sale of the collateral asset.

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Guarantor

A guarantor is one who performs the act of co-signing.

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High-Ratio Mortgage

A high-ratio mortgage is what you'll have if your down payment is less than 20 per cent of a home's purchase price. This type of mortgage may require mortgage default insurance. Mortgage default insurance is provided by the Canada Mortgage and Housing Corporation (CMHC), Genworth Financial, or Canada Guaranty Mortgage Insurance Company. If needed, your lender will make the necessary arrangements.

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Holdback

A holdback is an amount of money required to be withheld by the lender during the construction or renovation of a home to ensure that construction is completed to the buyer's satisfactorily .

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Home Equity

Home equity is the estimated market value of your home minus the total outstanding debts registered against it. See also: cash-out refinance.

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Interest and Mortgage rate

Interest-as it relates to loans--is basically the fee you pay for borrowing money. The interest you are charged when getting a mortgage is called a mortgage rate. The mortgage rate is the percentage interest you will pay back on top of the money you borrowed.

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Joint Liability

Joint liability means that two or more parties share responsibility for a loan, and is the opposite of several liability.

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Kanetix

Kanetix is your advocate for choice, and Canada's first mortgage rate comparison service to provide rate guarantee mortgage certificates.

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Lender

The party that provides a loan.

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Liability

Liability in refers to an obligation to pay a debt.

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Lien

A lien is a legal form of security interest granted over an item of property to secure the payment of a debt. The borrower who grants the lien is referred to as the lienor and the lender is referred to as the lienee.

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Low-Balling

Low-balling is a colloquial term for a buyer who offers enough money for the lawn and expects the house to come with it. Low-ball offers are common for houses that have languished on the market for several months.

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Maturity Date

A maturity date refers to the final payment date of a mortgage, at which point the principal and all remaining interest is due to be paid.

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Moratorium

A moratorium is a blanket blockage against a certain action or set of actions. In recent years, a few have called for a moratorium on home foreclosures due to economic recessions, but none have achieved it.